“The extremely low oil
price over the past two years
has caused enormous fnancial distress in Middle Eastern energy-rich countries,”
Dargin said. “So the goal is to
produce renewable energy for
domestic consumption, preserving exports for abroad; to
reduce the burden on the governmental budgets.”

New Saudi Determination

Years ago, Dargin predicted that the Saudis would not
be able to execute on their
ambitious 2010 stated goal of

43 GW of solar. But that has
changed, partly due to the
now-desperate situation for
oil exporters.

“This is not the Saudi Arabia of even a few years ago,”
he explained. “Due to resistance by certain ministries,
solar had been held back.

But a new energy megaministry has been developed to mitigate infghting amongstthe various ministries that impeded development of energy-based projects before.”“Ministers who resisted the reformation of the energy priceswere removed from their positions or placed in other roles. Thisindicates the sincerity of the government to restructure its econo-my and energy sector. The new energy ministry will have signif-cant streamlined decision-mak-ing ability to see solar energyprojects moving forward.”Saudi’s new initial 9. 5 GWgoal is a better start: “The newgoals are rational, with a recog-nition of the current limitations,and the political will to recti-fy them. With the major shake-up and economic restructuring,Saudi Arabia can now devotemore attention and political willto meet its solar energy goals,”Dargin said.

Geiger agreed that it’s likely that the Saudis could develop
local industry with solar manufacturing. “In Germany, Masdar
learned the challenges of manufacturing in a fast-changing high-tech industry and found investment and project development to
be a better ft,” he said.

“But Saudi Arabia has a very different industrial profle —and desperately needs jobs, with a 30 percent youth unemploy-ment rate.”Saudi Arabia’s Abdul Latif Jameel (ALJ) is part of Abu Dhabi’swinning consortium led by Masdar. ALJ acquired French solardeveloper Fotowatio Renewable Ventures (FRV) last year. Mas-dar and ALJ/FRV will build 200 MW — and possibly all 800 MWto be announced — of Phase III, owning and operating it for the25-year contract with DEWA, the offtaker.

The Gulf states already have high irradiance, extremely low
land costs, extremely low-cost labor, favorable loan rates, and
low tax regimes. With Saudi Arabia restructuring its solar energy policy landscape, Abu Dhabi’s manufacturing lessons learned
and refocus on investment, and Dubai’s trailblazing of competitive auctions in the region, the Middle East is now uniquely positioned to be the world’s new low price solar leader. à